What are the different steps of the audit?

In each financial or system audit, four different audit steps are followed: Risk planning and assessment, internal control testing, factual procedures and completion. The purpose of these audit steps is to provide a standard process that is used at every audit. In most organizations, the audit is carried out by separation by an internal audit or an external audit or accounting company. The auditor takes time to learn about industry, regulations, accounting policies and information systems. During this phase, many auditors work from a remote location because most of this information is available from independent sources.

In order to effectively plan the audit, the total range must be evaluated and documented. The standard financial audit is limited to the scope of transactions that occurred in the current period and is often completed at a summary level. The number of transactions and dollar values ​​is used to determine the upper and lower limits that will be used to set the audit values. The industry, the power of the innerThe inspections and any problems raised by the management determine the assessment of the audit risks.

One of the most important of all the steps of the audit is the process of testing internal controls. These processes and procedures are used to ensure the introduction of the correct approval before making a payment or transaction in the system. The primary method of testing internal control is accidentally selecting a transaction and checking the source documentation. If a random selection from a representative sample finds that the controls have been weak or missing, the sample size must be enlarged.

essential procedures are the actual process of collecting physical evidence of transactions and verifying the value of Posted to a particular account is supported by actual documents. This aspect of the audit is the most demanding time and is a very detailed work. Account selected for this type of checking varies, but is usually an account that monitors a range of activities with high and low ratesu.

The last phase of the audit is completion. This is the creation of a management report that summarizes all the procedures used to perform the audit, the result of various processes and supporting documentation. Audit reports have different formats or layouts used depending on the audience. For example, most banks require audited financial statements when applying for a commercial loan. They often have a preferred format, making it a comparison and reviewing a simpler process.